Kaye/Bassman Managing Partner Tim White Featured in the Fund Fire

Kaye/Bassman Managing Partner Tim White Featured in the Fund Fire


Kaye/Bassman Managing Partner Tim White Featured in the Fund Fire, Deutsche Poaches JPM Vets in Private Bank Expansion

Dallas, TX | 4/4/2016

By Danielle Verbrigghe

Two private equity-backed wealth management shops are joining forces to create an $8 billion registered investment advisor (RIA) and trust firm.

Kanaly Trust, a Houston -based wealth firm owned by Lovell Minnick Partners, is merging into Mercer Advisors, a Santa Barbara Calif.-based RIA owned by Genstar Capital. Under the terms of the agreement, which was announced yesterday, Genstar will be the majority owner of the combined firm and Lovell Minnick will hold a minority stake.

The transaction is the second for Mercer, which is not affiliated to the institutional consulting firm, since being itself acquired by Genstar last year. The firm also in January acquired Spruce Hill Capital, a $110 million Guilford, Conn.-based RIA.

“Adding scale is a major focus for many RIAs, because profits are limited for smaller firms under $1 billion in assets under management,” says Tim White, managing partner of private wealth management at Kaye Bassman International, a consulting and executive recruiting firm. “If they’re smaller than that, it’s difficult to make a lot of money as an advisor,” White says. “$1 billion in AUM brings you maybe $10 million in revenue.”

United Capital is one example of an RIA achieving scale this way, says Grail’s Cognetti. Private equity parents can open up a supply of cash to fund more deals, White says. But private equity firms typically aren’t it for the long haul, White says. “Private equity firms are looking for a trade,” White says. “I don’t expect those private equity firms to be super long-term holders.”

Read More: http://www.fundfire.com/c/1323613/150113 (Requires login)

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